North America Paytech Weekend Read

Reach: The Real Localisation Struggle – How to Capitalise on the Growth in Global eCommerce

There’s a reason why so many retailers are embracing global eCommerce – it has become an engine driving them towards vast new growth opportunities. And while consumers will always have a place in their hearts for domestic brick-and-mortar retail, they are now more enamoured by the ease and convenience of click-and-pay, as well as the (literal) world of brands it opens them up to.

Reach has relationships with banks worldwide to enable local credit card processing, offers consumers alternative payment methods where they are accustomed to using them, and provides fraud detection and prevention services, whilst simultaneously aiming to bring consistency to cross-border currency conversions using its FX solution. Matthew Cannon serves as Chief Strategy Officer at Reach, working to guide Reach’s overarching merchant engagement strategies. A veteran of the payments industry, Cannon arrived at Reach six years ago, bringing with him more than a decade of experience across some of the world’s leading brands, including Global Collect (now Worldline). Here, he shares his thoughts on how companies can capitalise on the global growth of eCommerce:

Matt Cannon, CSO at Reach
Matt Cannon, CSO at Reach

As international eCommerce continues to grow, regional borders will disappear from a consumer’s perspective to create a flat and open shopping ground. They’ll no longer stop to contemplate where in the world a purchase is coming from before clicking pay, as nowhere is out of reach and ‘foreign’ websites will have vanished.

The path towards this frictionless international payment experience contains many pitfalls, though. Only when all retailers offer a website and checkout experience that feels fully local to its cross-border consumers will this sales potential be met.

Why localisation is crucial

In a study of 30,000 online shoppers, Shopify found that over 92% preferred prices to be quoted in their local currency, and if it wasn’t available, at least one-third would close the store without making a purchase.

No matter what product or service they’re offering, businesses who offer international consumers their preferred payment methods, currencies, and languages will see more customers converting.

A whole different ball game

A retailer’s payment process in their domestic market could be right on the money, but when expanding their operations across borders things can easily go awry. An international offering needs to be simple, intuitive, and based on understanding of regional preferences.

Unfortunately, many retailers struggle to fully localise their operations either alone or with support from their global payment service provider (PSP). While a PSP will often promise benefits such as localised processing and acquiring, according to payment scheme regulations, a retailer will not be able to access local acquiring without establishing a physical presence in each market. This takes huge investment and resources to do so – and that’s before accounting for recurring costs and overheads, or the complexities of compliance with local taxes and regulations in each market.

Many retailers find these hurdles too tough to overcome, leaving them having to process international transactions as ‘cross-border’ sales. This means higher processing fees and lower approval rates, since they are not being handled by a local acquiring bank.

The currency conversion hurdle

What PSPs are good for is enabling retailers to offer multiple currencies and payment methods. However, they neglect to mention the complications of setting up pricing strategies, managing currency risk, and additional costs.

A retailer may be set up to accept foreign currencies, but many can’t keep track of all of the currency fluctuations that need to be managed to keep conversion rates high while maintaining profitability. If a pricing strategy isn’t optimised, the retailer’s conversion rates (and even profitability) will suffer.

Cross-border customers, in-country processing

The issues of deficient localisation can be easily fixed through the Merchant of Record (MOR) model. When using it, retailers can source optimal direct-to-market currency rates and take care of multiple payment methods with ease.

More than this, a retailer operating through the MOR model will not need to set up local entities in every country they sell in to access local acquiring since the provider of the model will be providing the on the ground presence instead. These connections mean transactions across borders will be processed domestically, eliminating the risk of currency movements, keeping conversions high, providing more attractive prices for customers, and resulting in more successful sales.

All this adds up to lower risks, reduced business costs, and a vast improvement in the customer’s payment experience – not to mention a retailer that is truly optimised to sell globally, with the benefit of a future-proofed eCommerce engine to drive their business even further.


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